Dando v. Foulds

Mr. Justice Gordon delivered the opinion of the Court February 4, 1884. The single assignment of error in this case is to that part of the charge of the court below, in which the jury were instructed that the agreement between Foulds and Freeman, in reference to the machinery, stock and fixtures, constituted a bailment and not a conditional sale. We have then, to consider the character and effect of the contract of the parties above mentioned, executed on the 18th of November, 1881. Was this contract in effect such a conditional sale of- the property therein mentioned as vested a present title thereto in Dorwin Freeman ? If it did so operate it was,fraudulent as to creditors, however good it might be between the parties themselves. It is to be observed, that to bring the case within the statute of Elizabeth, the contract must vest presently a title of some kind in the buyer, and the mere right to acquire the title at some future time, or upon the happening of some future contingency will not have that effect. Rose v. Story, 1 Barr, 190. In other words, the title to the goods must pass to the vendee at the time he receives the possession, otherwise there is no sale, but only a bailment. We must, then, look to see how, under the contracts before us, Freeman received the goods in controversy, and this depends largely upon the character of his original possession, for if his title was not that of a vendee when he went into possession, it is very certain that he has acquired no such title since that time, for it is not pretended that he complied with the conditions necessary to vest him with such title. But we have here, in the forefront of the agreement, a lease, first, of the building at an annual rental of one thousand dollars, and, second, of the personalty in controversy at a rent of twenty dollars a week and we also have separately a contemporaneous lease of what appears to be the same machinery, stock.and fixtures, for the same term and for the same rent per week, and in this instrument there is no condition for purchase, but it is, in all respects, a regular lease. Again, Foulds covenanted-, in the agreement first above mentioned, to sell to Freeman this machinery, stock and fixtures, at the [77] expiration of the lease, for the sum of $8700, and, on the other hand} Freeman agreed that at that time he would,_ at the price mentioned, buy the said property, and further, that he would purchase and pay for the same, at any time on thirty days’ notice from Foulds. But in all this we discover no intention to vest title in Freeman at the time of the execution of the agreement. His possession is to be only that of a tenant or bailee, and except at the will of the lessor he has no right to purchase until the expiration of the lease. But it is urged, that by the terms of the contract, Foulds could not only compel Freeman to buy after thirty days’ notice, but that in default of his so doing, he might sell the goods as it were on Freeman’s account, and charge him with any deficiency in the price. This however only amounts to an option in Foulds to determine the lease as to the personalty on a thirty days’ notice, and to treat the property as though owned by Freeman. But this option on part of the lessor, except merely in the. matter of time, does not alter the nature of the contract, and the balance is but a method of compelling performance, and the determination of the measure of damages in case of non-performance. Strike this all out, and nothing has been materially altered except to deprive the lessor of liis option to call upon the lessee to perforin his covenant before the expiration of the lease. But it still remains that he is bound to purchase at the end of the term, and if he does not do so he must answer for liis breach of contract in damages. But what difference in principle can it make that the lease might be determined in thirty days rather than in one year? It was still a lease, and if Freeman got the possession of the goods under it, he held not as owner but as a lessee or hirer. Thus, in the absence of oral evidence to prove an intent to hinder, delay or defraud creditors, held, as we are to the letter of the papers before us, we cannot presume that the parties intended any thing other than that which is expressed in their contract, that is, that Freeman held the goods in controversy only as a bailee, with an option to purchase which he never exercised. The Judgment is affirmed.